Toward Affordable Systems III: Portfolio Management for Army Engineering and Manufacturing Development Programs

The U.S. Budget Control Act passed on August 2, 2011, marked a new era of austerity in the nation s budgetary environment. The changes appear to be indefinite and present the Army and the rest of the U.S. Department of Defense (DoD) with unprecedented fiscal challenges. No DoD domain will likely remain untouched, including acquisitions. Yet the U.S. Army s need for mission-capable weapon systems will remain constant. As a result, the Army will need to find ways to ensure that its scientists and engineers are designing both effective and affordable systems in this frugal environment. The 2011 legislation brought added urgency to what had already been a growing premium within DoD: reaping savings through improved efficiency and cost-effectiveness. In 2009, the establishment by Congress of a DoD cost czar to conduct independent cost assessments of new major weapon systems was a portent of this trend. Now, meeting these DoD-wide objectives has become critical. In 2006, Deputy Secretary of Defense Gordon England issued a memorandum requesting that DoD agencies experiment with capability portfolio management for planning and implementing capability development. In a 2008 directive, he formalized his call for experimentation via a mandate that all DoD agencies use capability portfolio management to optimize capability investments and minimize risk in meeting the DoD needs across the defense enterprise.